POSITIVE AND NEGATIVE ECONOMIC IMPACT OF RUSSIAN SANCTIONS ON GEORGIAN TOURISM
On June 21, 2019, Russian President Vladimir Putin signed a decree banning Russian airlines from flying to Georgia from July 8 in response to anti-Moscow rallies in Tbilisi.
Although the most of the Russian tourists come to Georgia by land and via indirect flights, it is expected that the number of tourist from Russia will decrease in the current year.
According to the estimates of the National Bank of Georgia, tourism revenue from Russia will be reduced by approximately US $200-300 million, which is GEL560-840 million (current exchange rate).
Investment banks ( TBC; G&T) also consider the volume of losses. According to their forecasts, the country’s economy will reduce by about 1%.
The forecast of the National Tourism Administration is much negative.
According to their data, Russian travelers annually spend about GEL2 billion in Georgia. The head of the tourism administration expects the reduction by above-mentioned amount, in case non of Russian tourists will enter Georgia. According to Mariam Kvrivishvili, in 2019 it was expected 1 700 000 Russian tourists. During first 6 month of 2019, 700 000 Russian tourists visited Georgia. “If we will assume that tourist flows from Russia will stop and 1 000 000 tourists will not visit the country, our losses will be around GEL2 billion,” – said Mariam Kvrivishvili in TV program “The Forbes Week with Giorgi Isakadze.”
How much Russian tourists spend in Georgia?
According to the data of the National Tourism administration – revenues from international tourism displayed an increasing trend and reached GEL7.9 billion in 2018. This figure actually coincides with the data of the National Bank according to which the revenues from International tourism reached US $2.7 billion.
Total expenditure by Russian visitors during the estimation period was GEL1,972,427,681; average expenditure per visit was GEL1326.
According to the National Tourism Administration, in 2018, the total expenditures of Russian tourists were the highest.
Source – Forbes.ge